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News/Business. Becky Quick, Joe Kernen, Andrew Ross Sorkin. Business news and talk as the trading day unfolds on Wall Street. New. (CC)

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03:00:00

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TOPIC FREQUENCY

Us 52, Pebble 21, At&t 20, Washington 20, Clint Eastwood 18, Carol Bartz 16, Becky 16, Pebble Beach 16, New York 11, Randall Stephenson 9, Jeremy Siegel 9, Joe 9, Boston 8, U.s. 8, Apple 7, Nemo 7, S&p 7, Europe 7, Boeing 7, Steve 7,
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  CNBC    Squawk Box    News/Business. Becky Quick, Joe Kernen, Andrew Ross Sorkin.  
   Business news and talk as the trading day unfolds on Wall...  

    February 8, 2013
    6:00 - 9:00am EST  

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good morning. welcome to "squawk box." i'm andrew ross sorkin at cnbc's headquarters. joe kernen and becky quick are reporting. i don't know if i use that word lightly, but from pebble beach
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in california this morning. we're thrilled to see them. they're going to be talking to a number of people in the world of business and politics. we'll talk a little golf, see how joe is doing out there. joining me in pseudo, our own steve liesman and book brusca. then in the next hour, jeremy siegel is going to join us on set to make his bullish case for the numbers and then, nemo, the powerful storm taking aim at the east coast. forecaster res warning it could be among the worst ever, more than two feet of snow possible in boston. many cities are telling residents, don't travel if you don't have to. airlines are now warning the blizzard could cripple travel and hundreds of flights have already been canceled. we're going to check in one on friends at the weather channel. just a couple of minutes for their latest forecast. also in the news, the justice department in multiple states reportedly discussing suing moody's for defrauding investors. any move likely to make a similar rival against standard &
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poors is testing likely so this likely to be more than two years out. the goal is to get more battle on potentially hazard just flights, so these flights will only happens. now let's head across the country to joe and becky and see what they have coming up this morning. joe, how was your week on the course? >> yeah, i had only one day in the tournament and it was one of those days that i'm used to out here. >> it was beautiful weather. >> it was beautiful weather and i hit a lot of different kinds of shots. when a professional golfer says that, they mean they intentionally hit a a lot of different kinds of shots. when an amateur does, we're just dealing with the situation.
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it was really fast. i'm playing with ratiff gussen, who is not only a great guy, but his tempo is still the way it was when he won those u.s. opens. i make him -- with my tempo, i say, just turn around, he'll quit the game if he watches me too closely. anyway, i know we want to get to our newsmaker this morning. carol bartz will be here, perhaps best known for speaking her mind. and this is true. in some colorful tones once in a while. so we'll look forward to talking with her about everything from yahoo! to apple to some of the big issues coming out of washington. and we're going to hear from at&t's ceo randall stephenson. and telecom industry veteran dave doorman, now the nonexecutive chairman of cvs caremark. plus, joining us live this hour, shawn carolyn.
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he was one of the first investor s for siri. i got up at 2:40 because i thought i had to be here at 4:00. >> because you can't do math and you didn't do the time change correctly. >> exactly. i did shower a little last night after the round. >> thank goodness. >> i made et here. >> and running through the rain to get over here without an umbrella. by the time i left, it was like, i'm not going back. >> you got a little hair wash on the way coming over. by the way, we also caught up with a true american icon yesterday afternoon. clint eastwood. the legendary actor and director is politically active. we talked to him about everything from simpson and bull to try to talk about what's happening in washington and his speech at the republican national convention and the now
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famous chair. he talks about how he came up with the idea to use the chair. >> i decided to use a different route because i figure they've heard that from about ten other people in front of me. so i tried something new. it probably seemed odd at the time. but, you know, i'm an odd person. >> he talked to us a lot more about that, guys. we will bring you more of that clint eastwood interview throughout the morning. joe, i should mention, he told me off camera afterwards the inspiration with behind how he came up with the chair gave us a little bit of a hint. i'm not going to till now, but i want people to listen for a bit. you'll be surprised when you hear it because i was surprised. >> he's a machinery man. 83, i think. >> 82. >> 82. i've seen him of the years and he hasn't changed. >> that's what i was thinking, too.
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we'll check in wie both in just a minute. >> joe, i think you do, you look very rested. >> i wish i could tell you i was paring it up, but i was not want 8:35, 8:45 in bed, but, you know, do the math. i think i needed to get up at 1:38. i got up at 12:40. >> you may have picked the right time, both of you, to get out there because i don't know if your flights are going to make it home by monday the way the weather is. >> anyway, we have a couple other headlines to get to. apple responded to hoarding sex sess cash. iron horn calling into squawk yesterday. >> we think if they distributed preferred stock with a 4% yield,
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there would be a stable demand. shareholders that want to own apple for the upside within the operations would continue to simply own the common and they would be able to take a lot of money off the table by selling the preferred to the institutions that want it. >> apple is you no saying it's in discussions about how to return money to its investors. we'll see what happens to that lawsuit. in other tech news, dell's largest independent shareholder has reportedly told the computermaker a this-hour buyout bid is now undervaluing the company. shareholder southeastern management believes dell is worth $20 million per share. amr critters reportedly plan to meet with the banks on monday. now mr. liesman with more
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stocks. >> a few stock toes watch after the bell. movers following quarterly reports. lingedin getting more earnings the. this marks the seventh consecutive quarter. activision blizzard posting better-than-expected earnings and revenues. it offers a cautious forecast for the full year. shares of coin star taking a hit. the operator of red box video current quarter results significantly below analyst estimates. it blames a slower movie release schedule. the company sights a fall of demand for its products in europe and africa, andrew. >> before we get back to pebble
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beach, let's see how the markets are setting up today. not a lot of movement so far. dow luxurious like it would open off about three points. nasdaq would open up two points. wti crude, up marginally. let's take a quick look at the ten year, as well. see there we're now at 97.1563 with a yield of 1.946%. quickly over to the dollar, i don't know, it's more of issue, but let's take a look at what's going on in global markets news. and we're going the talk to kelly in a second. >> weaker on the euro that we talked about ideas at davos, that the ecb may have to do more like the federal reserve. >> that is possible. >> miss evans. >> steve, andrew, hello. there's plenty to talk about, but i want to shake things up for viewers. there hasn't been a ton of move
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responding to the eu budget meeting which is reportedly winding up right now. there has been a lot of auction. adding 20% candidate as i can see here. the stoxx 600 is adding about 0.5% all told. take a look at this, bwin.com, there's talks about new jersey governor chris christie opening up online gaming. it leaves the possibility out there for atlantic city casinos to offer games like poker online. so bwin has a join venture with boyd gaming which is licensed in
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new jersey. and the view among analysts is that other states, potentially federal legislation could follow suit. this is a small step in the direction of perhaps allowing more and more of the u.s. market to gamble online, like you can already with this one. up 19%. watch shares generally speaking in the gaming session today because you can expect there will probably be some similar moves. just the final word, we saw the yen strengthening avenue the yen appeared to talk down some of its easing moves. the yen was still 1% stronger. the nikkei ended the day 12-day winning streak with one of its longest. back over to you. >> thank you, kelly evans. we will see you a monday. yesterday, we talked to former treasury secretary robert rubin about creating confidence in the
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markets and the economy. business really needs to better understand the very different set of issues and dynamics that washington faces. and conversely, washington needs found business better. an that would be very helpful in policy formulation and also in creating confidence. >> our guest host for the hour, the one, the only, bob bruska. thank you for being here. >> thank you. >> bob rubin was a little more cautious than the markets seemed to be suggest background the economy right mow. >> it seems appropriate to me. i think there's been a lot of happy talk about the economy. there was a feeling at the end of the last year, i think a lot of people in the election process thought the economy was doing better and gathering steam. and it seems to be steam. it's just kind of going away. there doesn't seem to be anything coming in behind it. the jobless claims numbers were
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very low for a couple of weeks and now they're back up to where they were. the job numbers look better to peop people, but they basically benefited from the numbers in the works. we like to look at hours worked. so if you look at the growth rate in numbers, it's declining. >> steve, the juxtaposition between john taylor and evans -- >> oh, you wanted to -- i'm thinking about rubin. why would i want to kill myself? >> rubin and taylor, both of them were pessimistic. >> but i was going to say, evans was -- >> right. >> much more optimistic. >> two different takes on fed policy and its efficacy, whether or not it's working. taylor went even further. taylor said that balsey is
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dragging down the yes and in the part that was online, i did ask evans specifically about taylor's comments. he said he has great respect forte lore, just doesn't understand where he's coming from. evans says that he sees qe leading to better auto loans, better housing and ultimately he thinks what's happening in the market right now is a recognition from investors of what the fed wants investors to understand, which is that they are in it for the long haul. >> on the other people of news, and i wanted to relate this back, we're talking about apple and david einhorn and cash. it's a larger story. >> obviously, david einhorn discovers that apple has cash two minutes before my interview with evan. no, really. i've been screaming about the cash for a long time.
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eveng it's high time. >> but evans is applying no pressure. >> i'm not sure that's him job. >> but they've created this environment for this to happen. what do you mean? that's a risk decision that companies are making for some reason they've decided they need to operate with massive and huge cash balances, okay? and for whatever reason, there have been an absence of investors like iron horn who said, give me back the cash. find a way to redistribute it. i don't know, bob, in terms of macroeconomic development -- >> i think some of the corporate cash comes from firms that have made money and they don't feel like taking risk in this environment. apple is the technology company and i can understand apple's view that they have freedom of cash on the balance sheet. some of this is complicated. some of the cash is overseas, they bring it home, thee incur some tax liability.
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cash on your balance sheet is freedom. it's freedom from bankers. >> we're going to slip in a quick break. bob, you're going to be with us for the rest of the hour. and i'm going to send it back to pebble beach and the one and only becky quick. >> when we come back, we're talking about putting money to work behind the next big thing. since we're here on the west coast, we figured we had to technology technology. we're going to talk to an investor in siri intelligent and ask him if he thinks aapple has a cash problem. plus, a live report on the weather in the northeast as they phase for blizzard conditions. i'm glad we got cdw and cisco to design our data center. yeah, the cisco ucsc series server, with the intel xeon processors, help us scale smoothly, like a perfect golf swing. how was it before? clunky and full of unnecessary impediments. like charles' swing. i heard that.
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welcome back to squawk this morning. hewlett packard reportedly placing limits on the employment of students and factory workers f cross china. is says the move reflects a significant shift in how electronics companies view problematic labor practices in china. apple, of course, has come under scrutiny for its practices there. let's get to joe back from pebble beach. joe. >> hey, andrew. you can't be on the coast, obviously, especially in this area without talking about innovation and advancements in technology. shawn carolan is a managing director at menlow adventures. andrew is going to want to stay involved here because he knows this disrupter. >> ow viewers might know. but you can tell me basically
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that the things that you're investing in, whatever you want to say they do, i'll just go, ow. if you tell me you have contact lenses that you can do mental telepathy and -- >> are you investing in anything like that? no. so siri, how did -- i can't even imagine that a company would come up with that, but you decided that was something that made sense to invest in. >> you absolutely. it's one of those things that it's so ubl that at some point technology will get to a point where you can talk to a phone, it can do amaiding things for you. the question is when. then when you find one that you think is going work, we'll make the cut. how many things do you guys look at .how many finally end up into
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money? >> so we have seven partners. each of us looks at between 50 and 100 companies a week. >> a week? >> you look at websites. there's in-person meetings, but you're constantly absorbing one of the next new things and in any given year, the firm investor in about 15 new investments. we do seed to growth stage investing. who is fielding these calls that come in. >> the average age of the person calling? >> i've talked to as young as a 13-year-old. they've got good ideas. i think the youngest person we've probably done is in his teens. but they come from all walks of life. and the best companies, you have to go out and find yourself because they're not calling anybody. >> is anyone working on a rain cessation technology? have you seen -- >> i have not pictured that yet. >> are you listening to what's happening out there?
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>> yeah. sorry about that. >> the hardest thing you guys have to do is seeing these new, amazing things and knowing when is the right time. people have talked about a phone you could communicate with forever. i've heard people talking about the printser where you can print out 3d versions of things you might need. i've heard people talking about that for a decade and it sounds like it's coming closer to a possibly now. how do you know when is the right time? >> it's a really good question. in fact, that's one of the hardest things. very personal experience, cinema now was a company we invested on for movies over the internet. it was very obvious it was coming. unfortunately, they were a little too early. >> is that really something people are thinking about? >> we were too early, so they lost and net flex won. and a company called roku, which is a little box for 50 bucks. last year, they streamed a million hours. the nice part of our venture is
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you can be wrong about half the time and lose all the money and the winners you make ten times your money. >> is that wa you're looking for when you go in? >> the good ones should be ten times. sometimes it can be more than that, sometimes less. on average, you have that spread and you end up three times your funds. >> do you ever consider macro things? does it matter to you what's happening in europe? >> it always matters. if you say when do we return money to our investors, it's when there's -- it will come in the form of an ipo or an acquisition and that's heavily affected by the public market. absolutely. >> andrew doesn't have a car. so uber -- isn't that your thing, andrew? i used uber last night to get home. couldn't get a cab, used uber. >> it's impossible not to love. >> i mean, someone came to me with that idea, i'd -- -- it sounds simple, but undoable. >> that's a big trend of ours in investing.
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the platforms are there. there's a billion people on social networks, 150 million tablets. the substrate is there to do amazing things. i think of almost the perfection of an end user experience. uber, you push a button and the car shows up. roku, 600 channels on demand. i'm actually incubating a company. our interest started a company that was looking at the e-mail overload problem. we looked around for five years for a company to invest in. never found it and came up with a solution ourselves and i've been running that. >> what do you mean the e-mail overload problem? from how many i get in my inbox? >> yeah. there's more people on e-mail than there are on facebook and you get 150 e-mails a day and most people can't keep up with it. they spend 25 hours a week feeling like they're treading water. and it was an enormous problem and we finally thought of something that was going to work and we started it. >> filter out the stuff i don't
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want to see, you know you mean? >> i can't talk too much about it. we're in stealth mode right now and it will be launched next quarter. but it works with you. think of your brain and your ip box and together you can do amazing things. >> so you need qualified investors? is that how it works? can i give you money if i'm like a .0001 percenter? >> we have some individuals and limited partners that invest in the fund. >> can you gauge how people feel about risk at this point based on the kind of calls you're getting for people wanting to come in? are we seeing people move down the curve at this point? >> i'd say the general trend into flow of capital and adventure has been down some. there was a bubble and a good return. the top funds are still getting money. you know, we raised a new fund
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last year and i think the -- there's enough money to fund the great companies right now. i don't see anybody who has a really good idea that's getting traction and they don't get money. and it's a healthy thing for the industry overall. >> and what was your degree in? >> i've got a bachelor's and masters in electrical engineering with a computer science minor. >> ee and computer science and -- >> from stanford mba. that moved me out here in 2000. >> did you ever have a date? did you -- >> i had to work really hard to convince my wife to marry me. >> ee and then an mba and all this from stanford? >> actually, illinois. university of illinois champagne was my ee degree. >> i have to look at that again. anyway, thank you. i got up -- >> good to be here. >> let's continue this conversation. >> thanks for having me. >> thanks for coming clean on your educational background. i appreciate that. i thought appeared rue would
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want to ask something. andrew, you weren't excited? >> all right. joe, thanks. sign me up for some shares in that handle. >> i want that, too. >> i happen. i am desperate for it rye it now. >> we're googling for it rye now. joe is going to invest in it, make a ton of money and leave us behind. a powerful winter storm is on its way from the east coast. jen carfagno -- did i say that right? >> carfagno. >> joins us from the weather channel. >> by the way, i'm going throw in a few bucks, too, for that new product. we need that when we have a storm like this. the scale only goes up to ten. we don't see something like this every day even every year. we're talking about an historic storm. boston, 10 out of 10. blizzard continues expected. portland, same issue, as well. we have blizzard warnings for 23 million people overall, 54 million people under some type
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of winter storm warning or adviso advisory. and it's two storms coming together. the radar, too, shows you where things are. we have that snow coming around now through michigan and moving into parts of new york state. this storm, this is the one that's bringing all the punch and the moisture and we've got rain now starting to move into places like philadelphia, some rain being reported. new york city, nothing yet but it's on its way and that's why we're timing it out here. new york city is a tough forecast today. it's going to start with snow mixing into rain and changing over to rain and back to snow and them comes the big snowstorm accumulations. we're looking at 12 to 18 inches here. southern new york, boston, 18 to 24 inches with the wind blowing around, that snow drifting. the snowfall travel extremely difficult if not impossible. folks are being asked to stay off the roads starting now. back to you guys. >> thank you. we'll have to see if becky and joe can make it back on monday. coming up, randall
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stephenson speaks out on smartphones and tablets and much more. to grow, we have to boost our social media visibility. more "likes." more tweets. so, beginning today, my son brock and his whole team will be our new senior social media strategists. any questions? since we make radiator valves wouldn't it be better if we just let fedex help us to expand to new markets? hmm gotta admit that's better than a few "likes." i don't have the door code. who's that? he won a contest online
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welcome back to "squawk box." charter communications is set to buy optimist west for $1.63 billion deal. the fed is still trying to determine which of its computer systems has been hacked.
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meanwhile, overall circulation has been largely unchanged in the second half of this year this according to industry numbers that have just come out. back to you, becky quick, in pebble beach. how is it out there? is the weather good out there? >> no. it's raining on us right thou. it was beautiful yesterday. it's raining right now. we'll see what happens. >> andrew, you said "us" magazine. it said "u.s. magazine," but you said "us" magazine. you went back and predepended -- >> thank you. >> he's paying attention. >> you can't get me -- it's 3:30 in the morning, i know. >> you think that's too early for him, andrew, he can't give grief at that hour? >> i want to see you guys in "us magazine" next week out on the golf course. >> is there any video of joe on
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the -- on the course? >> is there? >> i don't think there is. >> joe, we have a point, let's see you in the bill murray video. >> you've got two more days to play at least. >> last year there was video. we never have video of you fishing, do we, liesman? >> yes, you do. and by the way, i'm more than happy to provide it. but we want to look at that great shot you had. >> actually, casting is something you don't want to do as a golfer and i do do it. the big slice. >> you know who i am, joe. when you go out there to play foss courses, i am the guy who is illegally fishing on the golf courses. i've been thrown off of golf courses around the country. >> that snuck off. >> guys wbts a few hours before anyone will be teeing off here at pebble beach this morning, but we did get the chance to catch up yesterday and sit down with the at&t chairman ceo randall stephenson. we talked about the growing demand for smartphones and getting them into the hands of
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consumers. also, reports suggest apple market share will peak in 2013. >> we have obviously built a very strong franchise of apple smartphones and, in fact, fourth quarter, we had another iphone records sales record in the fourth quarter. we also had a record selling android devices. in fact, you put it altogether, a key metric for us is when you look at customers who buy services under contract, almost 90% of our sales in the fourth quarter were smartphone sales to those customers that buy under contract. so you look at that and you say, well, about 68%, 69% of our customers actually had those. 90% of our sales are in that category. so it tells you there's still a lot of headwind left of people who are going to continue to penetrate this market with smartphone sales. from our standpoint, that's a good thing. people when they get a smartphone tend to consume more data. they tend to have higher demand in terms of rate plans and
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revenue per customer goes up as people move into those. and that's just smartphones. you know, we're not even into the world of tablets. and so we are quickly approaching a place where tablet sales are going to exceed pc sales. >> when it comes to smartphones, you did have a record number of smartphones that were sold but the margins were pressured a little because you got subsidizes. i know t-mobile is getting to the point where they're going to not do as many subsidies as they have had in the pacht. >> the industry is constantly looking at this. in fact, we have looked and have numbers run and plans on the shelves to do something similar to what they've announced. really, when you say there's no subsidies, it's just changing the business model. they're financing the hand set, per se. it's a rethinking of what the business model looks like. >> when you pay it out over several quarters or something. >> which some would say that's implicitly what the business
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model is. the carriers are financing what it has been for the consumer. that has been strong for the consumer. an iphone costs much more than the $200. >> how about $600 or $700 when -- >> that's what's been reported. we've not given a number. >> in the ballpark? >> yeah. you're in the ballpark. the customer is paying $200 for something that has much more value than that. that's done a terrific job of dproeg the industry and it's great for apple. actually, it's great for everybody in the ecosystem. it's more than hand set manufacturers. there are a lot of people manufacturing equipment that support all the underlying data. >> a little later, we'll be speaking more with randall stephenson. what he thinks about economic activity particularly when it comes to small businesses. shawn carolan is spending the hour with us. about half your time, you say,
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you're focusing on mobile and the things happening there? >> yeah. >> smartphones? >> randall talked about it. it's an incredible platform. the iphone is only five years old. to say that they're going to peak market share next year, who knows? they keep coming out with new hits and it's an incredible asset that they have. i think there's so many new, exciting ideas there that there's a lot of head room. ten years, we'll still be dealing with these smartphones. people use them constantly. there's lots of innovation there. >> we start looking at the smartphones and the tablets that are starting to merge in some ways. i have an ipad mini. the tablets are getting smaller. is that a good thing? does it matter? >> i think it's great. you think of all the factors right now, you have a phone in your pocket, with and a tablet in your bag. the mini goes back and forth. i'm imaging within the next five
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years, people have multiple in your house. you walk into the kitchen, there will be a tablet there. you're in your bathroom, they're reminding you to take your vitamin. >> it really isn't possible to do all these things in the air. does it help being an ee? do i have any idea how this is happening? >> believe it or not, i worked at motorola over ten years ago and it was the first wireless lan before wi-fi was called. and that was a long time ago. it's come so far. i think it's still going to, like, the amazing things are coming. >> so reality around us has nothing to do with what we're able to perceive. pick up a kul of things. there's a lot happen. >> whoa, look out. >> don't do that. >> this is what it's going to be able to do for us.
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>> i wish i could spill it on you next time. >> shawn, thank you for rolling with us. go ahead. >> there are things everywhere. >> but not spiders on my back. stop making me think that. guys, we will send it over to you. >> couple up, is there a doctor in the house? the ceo of cigna joins us. the industry and reform coming out of washington, stay tuned. what are you doing? work? work. cdw configured these lenovo thinkpad ultrabooks with intel core i7 processors. so, we can work anywhere. anywhere? sure - on the beach, in the woods, at the lake. what about on the green? let's not get ahead of ourselves. oh!!!
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welcome back to sidewalk this morning. david cordani, cigna's ceo,
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thank you for joining us. >> good morning. it's good to be here this morning. >> you had a pretty successful earnings announcement. revenue increased 33%, profits for the year, $1.73 billion. so i have a philosophical question for you that we were talking about around the at a table before we got to you, which is this. part of me wants you to make a lot of money. i want the -- as a business, as someone who believes in capital, i want you to do very, very well. and part of me says, $1.73 billion went to the wrong guy since you're the middleman. what do you say to that? >> if you think about our business, our business is framed as a health service company. so we're providing, in the majority of cases, health services for employers to lower health risks, to improve health outcomes, and then to ensure that individuals with chronic illness or acute illness are getting the best possible care. in the context of about $30 billion revenue, that's about a
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6% return on our overall business. so we're bringing a lot of value to the market, helping to improve health, improve worker productivity and is take costs out of the system by increasing quality. so we think it's a very fair return. >> david, obama care is coming. how is that going to affect your company? >> we see obama care as driving change in the marketplace and change is good because maybe to your core question, the status quo is not acceptable. we need to take costs out of the system and increase quality. for us, focus more on services. the change in the marketplace is a positive. one of the biggest changes we see happening in the united states is the opportunity to partner with physicians, to collaborate with physicians, to drive increases in health quality. today we have over 50 collaboratives already up and running in the united states where physicians are more paid based on the quality of outcomes haves the quality of services. as a result, people are getting better quality of outcomes, better services and costs are coming out of the system. >> david, give us a -- your
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outlook for the year ahead and a little bit beyond that. to what extent, when washington is -- it's in the middle right now of the process of trying to find cost savings. do you expect some of those cost savings to come at the expense of profits at your company? >> steve, we're a global company, first off. and to the core of your question, those type of changes and disruptions are happening all over the world, whether it's in southeast asia or in europe. the sustainability of costs are putting pressure on every government, every employer, every individual. so from our point of view, as long as we're dealing with change, we'll be able to both grow the top line of the company as we have over the last number of years and continue to deliver a good return. but it's only if you're able to engage that individual and engage the physician. pay based on quality and then lower health rickes and improve
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returns. i believe if you're going the maintain the status quo as an insurer, you're going to come under meaningful pressure. we're not an insurer. we're a health service company so we see growth opportunities and very good returns in the future. >> david, we're going to leave it there. the music is playing us out. hope to see you again very soon. >> interesting conversation. coming up, outspoken leader carol bartz. plus, jeremy siegel. but first, john fortt with an exciting new technology. >> we all now drunk driving is dangerous. texting and driving, just as dangerous. i'll tell but a company that's using technology in a couple of way toes drive that point home. get ready for a lot more of that new-plane smell. we're building the youngest, most modern fleet among the largest us airlines to ensure that you are more comfortable and connected
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and welcome back. we were reporting from the site of at&t's pro am, pebble beach, the crosby. so much history to the tournament out here. jon fortt joins hop, skip and a jump from where you are to get down here. you know this whole area. >> yeah, yeah. it's a long jump. i mean like an hour and a half drive. but not too bad. >> so it's only an hour and a half. have you spent much time in this area? >> no. this is above my pay grade down here in pebble beach. >> have you ever seen a coastline that is -- i mean if you haven't been here, it is magnificent. >> it's gorgeous. but in california, i mean, you go down to southern california,
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there's more gorgeous coastline. we've got -- >> i like point lobos. >> it's an embarrassment of riches. >> it is. you've got a report for us. >> i do. >> we at least want you to do that for us. >> put me to work a little bit. before the sun comes up. and you got the sweater on. which also looks good on you. >> i didn't expect that from you. you're not a big sweater fan. >> it's not the sweater -- when shactman wears it i think it looks good. that looks good. depends. >> i was a little self-conscious putting the sweater on because i didn't know what you would think. >> i've been wearing a sweater -- >> all right. actually, nexting and driving really serious problem. just as bad, maybe worse, than drunk driving. at&t is trying to take this on. ran stevenson, ceo, very serious about this. turns out that one of the things that at&t is doing came from an idea from someone in billing, in detroit. but take a look at exactly how big this problem is and what they're trying to do about it.
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the numbers are eye-popping. studies show drivers are more than eight times more likely to have an accident while texting. in 2011, distracted drivers were involved in 1.3 million accidents, injuring 387,000 people and killing more than 3300. but now, help is coming from an unlikely source. wireless companies. >> our objective is get the word out, change behavior, and save lives. >> reporter: at&t is spending tens of millions on its it can wait campaign, which features an online pledge. >> i sent one, stupid meaningless text and killed a man. >> reporter: jar be public service announcements and even a driving simulator. >> did you know texting takes your eyes off the road for an average of five seconds. >> reporter: but the company hopes its latest tool will be the most effective. an app that blocks your phone from sending or receiving texts while you're driving.
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here's how it works. once your phone detects that you're moving at 25 miles per hour the app automatically turns into drive mode. anyone texting or e-mailing you gets an auto reply telling them that you're driving and will get back to them soon. the app also limits your ability to make phone calls while driving, allowing you to send or receive calls from just five numbers and routing everyone else directly to voicemail. and while most of us probably associate distracted driving with teenagers, at&t's quick to point out this is one app everyone can use. >> our message is that everybody, no one would think about drinking and driving. if you're an adult, you're a teenager, same message goes for texting and driving. >> and that app is actually the brainchild of a woman in billing in detroit for at&t. a friend of hers had a family member killed in a texting and driving situation. she came up with this idea. and it got pushed through the company. so -- >> jon, i love the idea. and i think it's great. a couple questions about how it works. first of all if i'm riding in a
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car am i allowed to text or does it think that i'm the driver no matter what? >> this app is not perfect. it's based on guessing how fast you're moving and it doesn't know if you're driving or not. even if you're walking and you're between two cell towers and you switch between two towers it might think you're moving really fast and shut you down. >> walking you could get in an accident. >> that lady fell in the water. >> so i'm okay. i think we should lower it to like two miles an hour. >> maybe those people need to have their phone shut down. >> this is a great campaign for at&t. because if you show people, like that young man that said that one text and showed the bicycle, that he hit. i mean, you don't think that. you don't think that. the other thing, i can't imagine, do people text on an iphone? >> yes. >> how can you possibly -- i can't -- sober, not moving i can't send a legible message that -- it's so small. i can't imagine trying to text with an iphone. >> yeah, it's weird.
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i have a tablet i guess for texting on touchscreens but it's kind of like a range of comfort levels. >> do you think that people would chafe in terms of personal freedom if it became law to have something -- like if they get that application down to where you could actually use it where you can't -- >> i want it for my kids. >> would that pass muster in terms of? >> people probably would. but you mention the thing with kids. it's something i was talking to at&t about yesterday. i said, can you tell if your kid shut this app off if you got it on their phones? that's something i think they might be looking into. >> there must be a way to do it. where it's just, you're unable while you're driving to text, right? it's not that much different than drunk driving, really. >> what do you think? >> i think that, to your point, on android you can actually do that. inside the operating system you can lock it up. on ios you can't. you don't have control. but it's not just the texting. i mean music, people are watching videos, it's scary, i drive down the highways in
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california, and you see -- >> not that you're doing it. >> every other car somebody's looking down. it's a real issue. >> it really is. >> jon, thank you very much for coming out and playing with us this morning. >> yes. >> sean, thank you for joining us. >> you were up all night. >> you kind of wandered by on your way. >> always up. >> all right. back to ec, englewood cliffs, bracing for some snow. >> thanks, guys. we have about a minute or so, we have bob, get your thoughts on the federal reserve this year. do they do a full trillion, 85 billion a month? >> i think there's a good chance that they will. they seem to be on that path. and i'm not that constructive on the economy. i don't think the economy is getting that much better that fast so i think that given their parameters i think that they're going to keep plugging away at the markets, and i kind of share some of the concerns that john taylor has about it. >> about what? the program itself is what's responsible for dragging down the economy. >> well --
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>> that's a little bit of an extreme view. i don't think it's help. i do think at some point there are some negative spinoffs from that. >> is it hurtful right now? >> well, you know, you have some of the fed members, you have some of the fed members talking about bubbled markets. >> right. we're going to come back and talk about that in the second half. >> we've got corporate leader carol bartz in pebble beach. plus making the walk right now, we have him her,er ismy siegel. how? cdw and hp networking implemented a virtual application network that reduces the time to deploy cloud applications from months to minutes. with fewer bottlenecks like this. finally. charles! client golf. aim for the lake. really?
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this is a special presentation of "squawk box." one of the most powerful women in business, carol bartz. >> i think you're going to see a pushback towards a lot of enterprise apps. >> the ceo of telecom giant at&t. randall stephenson.
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>> if things have to change, let's get them changed and let's get it put in place, let's get stability for the business environment. >> wharton's jeremy siegel on the 2013 stock surge. >> i really think so. and i think 16,000 to 17,000 is a very strong possibility. >> and a true american icon, clint eastwood. >> let's get going. let's get to work. >> the second hour of "squawk box" begins right now. good morning and welcome to "squawk box" here on cnbc i'm andrew ross sorkin, cnbc's world headquarters. joe kernen and becky quick reporting from pebble beach, california today. we've got a huge show and we're going to have more from them in just a minute. first a number of stories that we're following this morning, including nemo, the powerful winter storm taking aim at the east coast. forecasters are now warning it could be among the worst ever. more than two feet of snow possible in boston. a foot or so is expected here in
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new york. many cities are telling residents don't travel if you don't have to. residents have been making preparations up and down the coast. plenty of flights grounded. about 2600 flights have been canceled in anticipation of the massive winter storm. we're going to have more details from the weather channel in just a few minutes. we've got some headlines from steve. >> thank you, andrew. boeing has got an faa permission to resume test flights of its 787 jets. boeing wants to test the jets' batteries under flight conditions to determine the source of the problems which caused the 787 to be grounded for the past three weeks. mcgraw-hill's credit rating has been cut by fitch. it now rates mcgraw-hill at about about abobbb-plus from th. that follows the suit against the company's standard poor's unit. now to becky in pebble beach. >> hey, steve, thank you very much. we are at the at&t pro am at pebble beach. we've got business leaders, golfers, celebrities.
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they're mixing it up on and off the course. yesterday we had the opportunity to sit down with award winning actor and director clint eastwood. here's his message for washington. >> it's the same message that i put out with the empty chair. let's get going. let's get to work. mr. obama won, and let's get out there. let's get out there. there's no budget coming in. who's doing these? i mean you got a big staff. a lot of people. isn't anybody helping? isn't anybody jumping in there? people going places. all expensive rides. let's get in there and get it done. >> we'll have more from clint eastwood a little later in the program. we'll also get his thoughts about washington and the reaction to the now famous chair speech at the republican convention. in fact, we also found out what was the inspiration behind that whole bit with the chair. we'll talk about that a little bit later. we also caught up with at&t chairman and ceo randall stephenson and here's his take
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on the state of the economy right now. >> we also saw for the first time in awhile, business spending and investment picking up. we had some segments of the business market that were actually positive for the first time in quite some time. so those were all good indications that maybe, you know, we're maybe starting to see a little bit of activity. but it's still kind of sluggish, if you will, and business, general economic activity is a bit slow. and so, we're hoping 2013 could produce a little tailwind for the economy as opposed to headwind. >> hmm. one big problem, as randall stephenson pointed out, is that they are not seeing a lot of new business starts. ear going to talk more about that. and in a few minutes we are coming up with our guest carol bartz. she'll be joining us. but before we get to all of that let's get back to andrew and steve at cnbc headquarters. >> thank you, becky. i'm looking forward to that interview with carol. i think she's probably got a lot of interesting views about what's going on in the valley and specifically yahoo! there's so much going on. >> she always has an interesting
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way of putting things, too. weigh can't wait to hear more about it. >> that's a very interesting way of putting it. we will get the seven-second delay button going. our guest host this morning is one of the world's best-known bulls. jeremy siegel is here sitting in becky quick's chair. >> yes, i am. >> how you doing? >> i'm doing great. >> i think i want to be in pebble beach today. >> we all want to be in pebble beach today. the last time you were here you said 15,000 on the dow was definite. this was not -- there was no equivocating here. >> well, almost. 70% that the end of this year -- i made the prediction, january, actually, 2012. so that's when i said i think the market's going to be between 15,000 and 17,000 by the end of this year and i'm sticking with that. >> so we had ron baron on after you, he's also in your camp, the 15,000 by the end of the year, but said look i expect it to be 20,000 in ten years. i expect it to be 30,000.
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you know, he believes that we are now back to some form of a formal 7% a year kind of thing. >> yes. i agree. >> is that receipt? >> yeah. >> and the question is why now? >> okay. >> and just give us a little historical -- i want a history lesson from you this morning. because we've just lived through what almost could be called -- not a full lost decade, but almost. maybe we call it a lost decade. so why did we lose that decade, were there other lost decades along the way, and then what happened afterwards? >> okay. long-term on stocks, return is 7% a year after inflation. that's the real. people ask me, they said, well, you know, last 12 years, 2000 to 2012, it's a long time, and we had virtually zero returns. >> mm-hmm. >> the lost decade as you said. but you have to remember, we started that period, 2000, with the price earnings ratio of 30 on the s&p 500.
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that is twice the long run average. and that's the key why we did so badly. 1982 to 2000 bull market was the greatest in history. >> the question is, why do you believe that part's repeatable? if you take that piece of it out of the last 100 years. >> right. >> it doesn't hold up. >> well, we had -- because that period of time we had, you know, 25% returns every year. where are we today? we're at 14. price earnings ratio. we're slightly below the long run average. and that's why i think we can have those average returns going forward. >> wouldn't you have to have average growth to have average returns? and since it seems to be consensus that growth is going to be lower than it has been in the past, wouldn't you expect p/es to be lower than they have been? >> no. i'll tell you why we won't have p/es lower, because the interest rates are lower. the alternatives are lower. you don't have the competition.
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so i -- >> it's a good point, jeremy. i want to push on that because i was talking to evans yesterday and he says the key to fed policy working is the belief among investors that the fed is going to be low for awhile. >> right. >> irrespective of what happens in the economy. except for maybe inflation. do you think investors really believe that? that strikes me as the thing that people are not willing to sort of walk across on that plank. >> right. >> from one side to the other. and that's really what holds back price earnings. >> i've been one that's saying i think interest rates are going to go up faster than people think. i don't think it's going to be the middle of 200015. i think it's going to -- >> so you don't believe them. >> hold on, because there's a contradiction here, professor, if i might. just -- you're saying that p/es can remain bigger because interest rates will be lower. and you just said you don't believe interest rates will be lower for longer. so square the circle for me. >> i'll square the circle. it's going to be we're going to
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have interest rates go up but there's record low levels now. somewhere between -- don't forget we were at 1.8%. >> what kind of rate do you think we'll get to by 2015? >> you talking about the long bond? yeah, i'd say 4%, 3.5%. >> so this market has to fight the rise of the ten-year from 2 to 4, and it goes up all along the way? >> yeah. because you know what? we'll only get to the ten-year being three or four if our economy starts moving again and corporate profits get moving. >> i almost feel like you are in the john taylor camp. >> no. >> but he doesn't like fed policy. he thinks it's really inflationary. i'm saying, interest rates are going to go up because the economy is going to do better. yeah, we're going to have a little bit more inflation. but you know, 2% inflation, even 3% inflation, is a sweet spot for stocks. the real assets -- >> you gave us a number for what
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the real all-time high is in constant dollars. >> right. >> so give us that number and tell us where we are relative to that. >> i think that the s&p is 1500 right now? >> yeah. >> if -- correct for inflation in 2000, the s&p was over 2,000. i think about 2100 -- >> in inflation adjusted dollars? >> we are still way below the record. >> professor thank you very much. i appreciate it. interesting to thing about. higher interest, whether or not stocks go up in that environment. back re going to send you now to a place where the weather should be much better. us want to be there i think. mr. kernen. >> oh, thanks, andrew. coming up our newsmaker of the hour, famed corporate leader carol bartz is going to speak out on yahoo! apple and much more. plus the northeast bracing for a major winter storm. 2600 flights already grounded. forecasters warning that this storm could be among the worst ever. although it is winter. a live report from laguardia when we return. ♪
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welcome back to "squawk" this friday. take a look at how the futures are setting up ahead of the
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market. dow looks like it would open up about 4, nasdaq up about 2, and the s&p up about a point. also in the headlines, the northeast bracing for a winter storm called nemo. and it looks like a bad one. 2600 flights already canceled. the airline stocks aren't moving just yet. but we're going to continue to watch them this morning. and other industries likely to be impacted by the storm. in the meantime let's get out to mr. kernen in pebble beach where the weather is hopefully better. >> call me joe, andrew. >> call you joe? >> okay. >> i call becky quick, miss quick. >> miss quick. you got a lot of -- i want you to call me joe. >> shake it up a little. >> our guest host for this morning -- i want you to play here, andrew, because you know yahoo! as well as anyone. one of silicon valley's most recognized and outspoken executives, carol bartz, former president and ceo of yahoo! also the former chairman, president and ceo of engineering design software company auto desk. carol, it's good to see you.
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>> thank you. >> i don't want to -- we've already alluded to some colorful language, which we'd like to -- that's -- that's one of the funnest things -- was that a conference? >> you mean blue, yellow, orange? fuchsia? >> trying to think if i could get you -- oh, blue. shouldn't have put that one in. >> maybe in passing we'll get -- find a way for that. but in terms are you surprised that yahoo! -- is it really getting traction? is it a sentiment change? what do you think of what's happening there now? >> listen, i'm still a shareholder so i -- by the way, i love yahoo! i love the people. i love the brand. the products. so it has to get traction. it's just serving almost 800 million people so to say it doesn't have traction, when we get all excited about some site that has a million new users is like, really? so i think yahoo! is going to be around for a long time.
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and i think marisa and the gang, all those great people behind, are working hard to make sure that's going to happen. >> and some of the initiatives are actually making a difference. this wouldn't have happened just if marissa mayer hadn't gone there, you think the stock would have responded or the business would have responded? what has been the main thing that she's done that's helped, do you think? >> well, there's kind of two things in motion now. there's the alibaba assets, and the cash from that. that was before marissa. and, good for yahoo! they're enjoying their buybacks. and that infusion. but she's working hard on those products. she, all the people, are working hard on those products. when i was there we worked hard on the behind-the-scenes. we had to get the engine going before we could get the beautiful outside and the dash and all those things. >> that's a way of putting it. how that would -- you laid the groundwork for some of that? >> well, there was a lot of
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technology debt, we like to call it, in our world, which is we didn't pay our debt, just like your house fell apart because you forgot about maintenance. so there was a lot of things happening in technology inside yahoo! that had to be upgraded. and the whole team worked very hard on that when i was there so you can now start making changes on the top that the users see and that the users think are important. and bring it into more modern world. and of course, now, we also have the big mobile push for everyone. that's a whole other topic. >> one of the things you talked about was that you had told and explained to the board that there was not going to be revenue growth until 2012. >> well, there wasn't. >> that's exactly what happened. we saw revenue growth in the last quarter. is that growth that would have come anyway? >> you know, i've been gone a year and a half. so it's no longer relevant to say this would have happened anyway.
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but, thank you for remembering that, becky. we were very clear. no revenue growth until '12. i would have thought actually maybe a little more. but you know, when you're sitting in that seat it's one thing. when you're a pundit crawling out from under a rock it's another thing. so there's way too many of those. trust me once you've been there there's a lot of rocks out there and they just call out and zing in some advice. and call back. so i'm not here to give advice to yahoo! i'm here to just cheer them on. >> one of those, the biggest questions, though, is just how do you find new users who keep coming in. that was one of the problems, not only with yahoo! but plenty of the older technology things that are out there. i say it because i still have a yahoo! account from the very first one i ever signed up for. aside from my nbc account i have my yahoo! account. the problem is getting people like me to come back in and
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using all the different sites. metrics showed even the most recent ones out, the traffic continued to decline there. how does yahoo! how do other places that have been around for a long time, try and keep those people in and coming back through? >> it's interesting, becky. it's not so much that people don't come back. they're coming back through a mobile device and that is tracked differently. and it doesn't have the screen space to do effective monetizization. >> that's a problem for everybody. >> a terrible problem for everybody. dell. everybody's going through this. this whole change to a different screen, is just shaking every metric and turning it on its head. mostly revenue. which is the worst metric of call. to have a problem with. so it's not so much that people don't come to yahoo! for their mail or come to yahoo! for finance reports. they're coming in through a small screen, and therefore you can't monetize and count them the same way. >> i think google has tried to counter this saying it doesn't
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matter how you're trying to reach people if you're an advertiser you're going to pay one set fee and they're going to reach everybody whether they're coming in from a laptop or via mobile? >> that's just this week, as you know. i applaud them for that. they have, of course, the muscle power to pull that sort of thing off. but, it's -- it's not quite as simple as that. because, you run the possibility that the whole thing degrades a bit. the advertisers -- >> you mean the rate the advertisers will pay? >> exactly. exactly. >> so, so when you try to pull something up by pulling something down and the thing you're pulling down is 90% or plus of the revenue, that's a problem. >> i remember business model with mobile health yahoo! becomes anything more than -- you work on your content and try to make it a place where you still get eyeballs but then you can't really monetize it.
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it seems to be almost -- i look at the way tim armstrong has set up aol to be a profitable, much smaller entity, buyback shares, do things like that, to get the stock up, sell some of the intellectual property. but it, i don't see how hoo in the future where we talk about some of the leaders like facebook, and google and others. is it going to be there? is it a $100 stock again some day? >> well, that's your business, not my business. >> i don't think it is. >> well, then why did you ask me? >> i don't know. andrew -- is andrew playing in this, andrew? you know what i mean, andrew? doesn't 20 seem like a pretty good price? >> i think it's going to be a tough sledding, as they say here in the northwest. or in the northeast. you're in the northwest. where am i? >> how do you monetize? what do you do? >> get your geography right. >> what do you do, andrew? >> i don't know what you do. the one question i had for carol is, you know, google world, can anybody else win?
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meaning, maybe facebook but does it just mean that -- i can't imagine all of the data, even apple by the way, i'm not sure can ultimately compete with how google has been able to organize the world's information. >> you know, it's easy when there's a very, very strong company at a time to say no one can ever beat them. but history has shown it just happens time after time after time. is anybody going to grab google's lead quickly, or are they going to have a demise sometime soon? of course not. but there's things that every company doesn't do as well and there's new technologies that come along. and i'm such a believer in what silicon valley does and the possibility of a new that's ever ever believe that google is dominant, you know, for
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centuries is ridiculous. >> a lot of times the new doesn't come from the old, it comes from the new. >> almost always. almost always. >> so i don't know. anyway, thank you, carol. we'll have more throughout the show. quick reminder, cnbc -- cnbc -- cnbc -- cnbc and yahoo! used to have a business alliance. >> we still do. >> yeah, we still do. to share and co-produce editorial content of which it's great stuff. we were just -- is that a show recently? he looked very thoughtful about what i was saying. >> thinking about it. >> trying to get a reaction shot. of how you actually looked. and i thought it was a really compelling, really compelling look. >> yeah. thanks, joe. i work on that. -- for hours at a time. i do work on that. we have to go, joe. i'm getting yelled at and i don't have the status you have to ignore the people yelling at you. we have been tracking nemo, a powerful winter storm headed to the east coast. nbc's erica hill joins us from laguardia. erica, good morning.
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>> good morning. where it is definitely a little busy at laguardia. that, of course, is because of the canceled flights. more than 2400. if you look at some of the airlines, the major cancellations coming from united, delta and american. just behind us a number of people waiting to get on those american flights. they've canceled 300 flights today. another 150 tomorrow. and in speaking with some of the folks behind the security where the line was going around the corner, they said it is definitely a much busier morning here today than an average friday. more people trying to check in early. i can tell you that was the case last night at logan when i was flying back to laguardia. a lot of people talking about the fact that they werg to get on an earlier flight, basically get out of dodge while they could. and that may have been a smart idea because, as we know, once these cancellations start, then you lead to the backlog. and not just at the major airports here in the northeast. of course the three major airports in new york and boston really going to be affected. but the backup that that will then send across the country. because planes may not make it to where they need to go, to then get to other destinations
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and the crews can also not always get to the airport where they need to be to get that flight off the ground. so those are some of the things that we are looking on today. if you do have a flight today, best advice, check with your airline. the good news here is that most airlines are waiving those change or cancellation fees for you to rebook your ticket. so that is the upside. definitely contact the airline. and you may want to use twitter as a resource. you tend to get a pretty speedy response if you tweet them one of your issues. so with that we hand it back to you and wish you good luck with your travels. >> erica, real quick. flights today obviously canceled, tomorrow. what about sunday and monday? >> right now i don't have firm numbers on sunday and monday. but that's one of the things we're looking into so i will check on that for you. >> thank you. by the way, this is your first, i think, appearance here on "squawk." i've been a huge fan of yours for many, many years. >> you going to send her a t-shirt? >> thank you very much. >> she needs a hat and a coat and all sorts of things. >> i look forward to it.
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>> then there's the hazing. >> send it all my way. >> we'll see you, erica. new jersey governor chris christie could be one step closer to making online gambling legal in his state. we're going to have the stock impact. that's coming up next. at 1:45, the aflac duck was brought in with multiple lacerations to the wing and a fractured beak. surgery was successful, but he will be in a cast until it is fully healed, possibly several months. so, if the duck isn't able to work, how will he pay for his living expenses? aflac. like his rent and car payments? aflac. what about gas and groceries? aflac. cell phone? aflac, but i doubt he'll be using his phone for quite a while cause like i said, he has a fractured beak. [ male announcer ] send the aflac duck a get-well card at getwellduck.com.
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steve didn't get that one right. we're approaching 7:30 on the east coast. welcome back to "squawk" at the top of the headlines. in the headlines the winter storm that's hitting the northeast today. new england's going to be bearing the brunt of it so get ready. two feet or more of snow but there will be plenty of white stuff to go around, also in new york, new jersey, and connecticut. let's take a live picture of times square right now.
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doesn't look so bad just yet. the first flakes have already fallen but the storm expected to pick up steam tonight. though the storm has yet to fully hit, travel plans already are being disrupted. so far airlines have canceled about 2600 flights. a number that will undoubtedly grow throughout the day. also in the news the faa has been granting -- has granted boeing permission to resume flight tests of its 787 jet. it's been grounded for the past three weeks since battery problems came to right. boeing wants to test the batteries under flight conditions to further assess the situation. online gambling may soon be legal in new jersey. governor chris christie has issued a proposal to an amendment that -- to existing legislation which lawmakers indicate they'll approve under the proposals. atlantic city casinos would run online gaming and pay a 10% tax on winnings. higher than the 8% casinos pay on traditional revenue. i thought it should have been higher. christie also wants the law to expire in ten years so give
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lawmakers oppo reassess it. news helping casino stocks this week on indications that the bill could finally become law. steve? >> more now from jeremy siegel. let's talk high finance theory here, which the academic world has advice for investors. and it's simple advice, complicated to execute, is the best portfolio, the pair time portfolio, the u taupe onportfolio is one that owns the world. >> right. >> and the conclusion of most academics is that most people are short the world. >> yes. >> so let's talk about your portfolio and how you own the world. do you own it in terms of gdp, do you own it in terms of growth? how should people go about owning the world, and why should they? >> why should they own the world is easy. right now over half the world's gdp is produced outside the developed countries. outside of japan. outside of europe and the united states. so, you know, and it was only one quarter 30 years ago, in 20 years it's going to be two
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thirds, and then in 30 and 40 it's going to be three quarters. so the world is changing dramatically. you've got to own the world. not only is that where the growth is but that's where the capital is going to be. and that's going to be where the capital is going to flow. >> the reason i've heard, by the way, is the world, no matter what, grows. it grows 3%, 4%, 5%. you can have a recession in america. you can have a recession in japan. but the world is always going to grow and you want to really tap into that growth. and one thing i've heard a lot of financial academics or experts say is people are short global real estate. it's a hard asset to own but in terms of global gdp, and total assets, they ought to own more real estate outside of their own country. >> right. well it's just like 30 years ago, people were short real estate -- outside of their own home they couldn't even invest in commercial real estate until we had reits. and then reits came on and now we're getting international receipts. i think that is an important asset class absolutely. >> the main lesson is diverse indication. where you diversify and how,
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that's always -- >> i have one-third, one-third in developed countries outside the united states, called efa and one-third in emerging markets diversified across all of them. one-third, one-third, one-third. an easy formula. >> are you diversified? >> i have -- we're not allowed to really invest. i do some mutual funds. >> right. >> but i don't really -- >> you have no idea, do you? i'm looking at you. >> i've always tried to not. >> i try to pay attention twice a year i meet with a guy. >> i'm -- i always thought that as a reporter i shouldn't pay attention to it -- >> you can do asset allocation. >> there's a guy who does it. i'm not supposed to know what they do. >> really? >> i prefer not to know. i'm going to get back out to pebble beach and becky. i keep calling everybody by their last name. i was going to say becky quick. >> you just -- >> thank you, andrew. >> you just noticed that? >> still to come this morning on "squawk," we have more of our conversation with clint eastwood. why the legendary actor says that d.c. is broken, and we'll get his solution for fixing the problem.
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welcome back to "squawk box." let's get a check on the markets with our trading block on oil matt smith commodity analyst at schneider electric and on the markets j.j. kinahan chief derivative strategist at t.j. ameritrade. how does the snow effect this? are people going to leave early? is there a big impact on commodities? >> i think absolutely that talking to a lot of my friends in the new york area, many of them are just going to work from home today. i think you're going to see desks with just kind of essential people, so to speak. and when you see that you often see that we have more dramatic moves if we start one way or the other. what's interesting to me right here is if you look at the spx, s&p 500 we're trading just under 1510. and 1510 has been a tough area for us to get through. you saw we failed there when we got there yesterday. sold off kind of hard although we did rally back in the afternoon. it will be interesting to see if
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we get there today and if we have a similar -- >> so you're saying it's a low volume high volatility day. any action either way tends to create big swings? >> absolutely. think of it as the action around the holidays time. >> okay. hey, matt, i thought commodities are supposed to go up, or at least certainly natural gas on the eve of a big nor'easter. seems to have gone the other way on us. >> well, the bigger picture for natural gas is that we're well supplied. we're at a near-record production levels and so although we are seeing a bit of a last hurrah for winter here the reality is the market is well supplied. >> what's the story behind oil? i had people telling me that it's the federal reserve being active again in buying assets, creating that commodity inflation. what's your story for why oil seems to be spiking here? >> sure. there's all manner of reasons. we're actually quite a ju
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jump-check here for the crude level pushing around the highs for late last year. the same for wti. what we're seeing is this rising tide raising and that's taking crude with it. we're see equities pushing to highs and the euro rally as well. even though we some bad economic data coming through, that then promotes this weak dollar policy, interest rates not to be raised, sooner. and that just really lends further to support crude. >> jeremy? >> i think that the bounceback in china is one of the stories that's propping up oil. >> that's what evan's told me. >> absolutely. >> let's leave it there for now. thanks for joining us this morning. got a big show today. we have to move on but thanks for your thoughts. >> all right. >> see you, steve. >> coming up we've got more of becky's interview with clint eastwood. his take on america's leadership and the low pace of politics in washington. and then in the next hour, this is going to be big, too, we're going to talk technology, health care, and einhorn's suit against apple with david dorman. he's the former ceo of at&t, and
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welcome back to a special edition of "squawk box." we are live from penal beach this morning. clint eastwood has been very outspoken when it comes to politics and the government. we got a chance to catch up with him and asked him if he thinks washington is broken. >> yeah, i am surprised. i know it's always very easy to get mired down in political quagmire but it seems that right now, we're in a spot where just nothing's getting done. there's just a lot of people standing looking at one another, and maybe it just appears that way to us who are outside of the beltway. but, right now it's very disappointing. i just wish, you know, the election's over, everybody's --
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we should be moving ahead. the leaders aren't stepping up. >> do you think that's a reflection of poor leadership? do you think it's a reflection of people in america, look, it's a difficult problem and they don't want to hear the bad news or face the hard choices either? where do you think it kind of comes from? >> well, it's probably all of the above but mostly i think that people have to hear what's in order to pressure the people in washington to move a little quicker. i think they have to hear from the public out there and maybe the public is a little lackadaisical as far as you know, most, the average layman out there sitting, going, well, nothing i can do about it. so i'll just wait it out. but meanwhile, don't want to wait too long. >> clint eastwood said that that was part of the reason that he gave that chair speech at the rns convention at the republican
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national convention last summer. we'll have a lot more from mr. eastwood including the inspiration about how he came up with the empty chair speech. it's an interesting story. let's get back to our guest host carol bartz who is the farmer president and ceo of yahoo! also the former president, chairman and ceo of engineering design software at autodesk. and carol, we've been watching everything that's been happening in washington, and i'm sure you have, too. clint eastwood talked about his frustration. how about you? where do you think things are headed right now? >> i'm so frustrated i can't watch anymore. quagmire is exactly the right word. it's -- it's sad. if corporations ran their companies like washington's running, nothing would happen. because nothing is happening. so the republicans, i can't even go there, the disarray that's lapping. we need better. we need people to answer their vow. >> what do you mean the republicans? >> what about the democrats?
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what about the white house? >> oh, terrible. but, they won, so they're in there, they have the leadership, they have the power, they're not doing anything, and the republicans aren't forcing them or helping them do anything. >> i mean everybody won. -- nobody won. >> right. everybody's losing but people that are in elected office, there's a reason that they were put there, too, some people would say, you know, to put the brakes on what each side wants to put the brakes on what the other side wants to do. that's why we have the government to make sure that -- and the country is divided 50/50 on -- there's people that won, all private sector and just simplifying it. people that are private sector fans. people that are government fans and it's a tug-of-war. >> right. >> between the two. and boths sides were elected. i kind of understand it and i understand it's a quagmire. but i certainly wouldn't want either side to just roll over
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for the other side. >> oh, you can't. i mean people ask me all the time, is my next life politics. anybody that knows me knows that that would be virtually impossible. >> i think that would be fun. >> for about a day. and then i'd be run out of town on a rail. because the problem is, you have to say and do things and promise things to people you have no intention of ever doing. >> that's right. >> and i just don't know how that happens, how anybody as a person can do that. >> i guess the bigger question is how do you break out of that cycle? with some of the problems that we're facing right now with the deficit issues, with the entitlement issues that are coming up, how do we get politicians to start talking about some of those tough realities? >> i don't know. the ones that do get slaughtered. i don't know how we do it. i wish i were that smart. >> do you think it's holding back business at this point? or does business operate kind of outside the sphere of what's happening in washington.
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>> oh, you can't operate outside the sphere. the last few years, where anybody in a corporation was considered evil, and i really felt that way. i know my colleagues felt that way, you have to operate in spite of washington. and because, first of all, you have a responsibility, shareholders employees customers, whatever, but you're a business. and you're there to run a business, and to make good products and get profit, and la, la, la, everybody's happy. so you have to do it even with the weight of washington strapped to your back every day. >> you said that you felt the last two years that businesses and your colleagues and other people -- >> four years. >> you really feel like it's been a demonization? >> absolutely. >> or no? >> i think it's numbness. it doesn't seem to be getting worse. it's not better. but you just continue on. before i think all of us felt
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that we could, with rational talk change the mind and change the tone, like don't fly vegas and don't do this and everybody's bad so it cost people to do stunts like drive from detroit to washington in a two cylinder car. who cares? that's not the point. but now it's four years later and you just have to move on. >> there are a lot of ceos who seem to go to the white house often, or at least be there for the meetings and things that show up. you think anything gets done from those meetings? first of all, after having said all this, you still have to go. first of all, it's the white house. it's the president. it's like, wow. i don't care, i came from a town of 1,000 people. if i could see the president, man, the whole town knows. and, but, do things get done? hmm, slowly. i don't think they get done
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because of a particular meeting. i think they get done because of the raindrop of -- >> and the relationship. >> and the relationship. you know, besides, america is about hope. you also have to hope. >> private sector growth is -- i mean, that solves everything, and i hope hoping, i keep hoping that that's going to come home, just really be driven home where everything that we talk about is viewed in the -- from the prism of private sector growth. because our we're everybody it's a tragedy to grow at 1% to %. hopefully that we're coming out of that and hopefully unemployment comes down and we get down under 7% again because otherwise we're taking away the future from next generations. it's very frustrating. very frustrating. but it's, you know, i hope that this second term that that's going to be the mantra that we want private sector growth. that's what we're looking for. we've done you know he's done a lot with -- he's done a lot with
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health care, done a lot with, you know, transforming certain parts but now it's got to be private sector. i don't even care -- i'm even starting to agree about some of the deficit and when we do it, it's got to be -- >> down the road. >> near-term it's got to be private sector growth. >> you can't fix overnight something that's taking this long to crumble. >> more from carol bartz throughout the show. >> that's right. in fact when we come back from pebble beach we're going to continue to monitor winter storm nemo. it's expected to drop record levels of snow on the east coast. plus, lifestyles of the rich and famous from pebble beach. our robert frank will join us with a special report on real estate. >> thanks, becky. pebble beach is one of the richest zip codes in the country. we'll show you some of the area's biggest mansions on the beach and on the greens and tell you what they cost. i'm glad we got cdw and cisco to design our data center. yeah, the cisco ucsc series server,
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pebble beach is one of the country's most high-end golf resorts. and even though real estate is that a premium, sales are on the rise here. cnbc's robert frank joins us with some of the show stoppers of pebble beach real estate. this is this thing. including, $28 million mediterranean mansion on the ocean. what, is that half price, robert? >> no. it's full price. but you're not going to believe who the owner is. we'll tell you in a second. and real estate in pebble beach has never been cheap but it took a big hit in the housing crisis and dotcom bust. now it's on its way back. pebble beach may be a great
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place to visit, but it's expensive to live there. the average home price is now $1.6 million. and as the tech boom spills south from the bay area, the real estate market in pebble beach is also heating up. sales were up 18% in the fourth quarter alone, and realtors say the big problem now is that there just aren't enough homes for sale. >> our market is definitely driven by the bay area, a big part of our buyers, 65% of our buyers, come from the bay area. the economy is strong, but specifically silicon valley. there's a lot of activity there. unemployment is down. it's almost nonexistent. and just in general there's a lot of demand. and limited supply. >> we did a little mansion shopping of our own in pebble beach and found some stunning views, and breathtaking prices. this home on the ocean is on the fabled 17-mile drive, its 2.6 acres, 10,000 square feet, six bedrooms and floor to ceiling windows, looking out over the ocean.
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price tag, $27.9 million. for golf lovers, here's a better option. right on the 14th hole of pebble beach. it's five bedrooms, and 7,000 square feet, and one acre. the seller is none other than bill gross, the pimco founder. these views have no doubt inspired some great investment ideas over the years. but it will cost you, $24 million. chances are this will be a vacation home since there are very few offices or industries in pebble beach. >> no one gets transferred to pebble beach. >> joe, maybe you could get the transfer to pebble beach. maybe this would be a first. you'd be the first transfer to pebble beach and bill gross could give you a deal on that $24 million house. he's a friend of cnbc's. >> yeah, i get transferred at least for the week. you've shown us apartments in new york that cost $100 million. >> yeah. >> so that mansion -- >> yeah, but where would you rather be, joe? it's a value out there. >> i know, $24 million with a
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view of the ocean, and you know, living near monterey or four times as much for, you know, for being locked on the upper east side. >> as long as you don't have to pay the california taxes it's a great place to visit. >> that's a good point. thanks, robert. coming up, another big hour live from pebble beach. more from legendary actor and director clint eastwood. including what his inspiration was behind that famous empty chair speech at last year's republican national convention. come on, nowadays lots of people go by themselves.
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no they don't. hey son. have fun tonight. ♪ ♪ back against the wall ♪ ain't nothin to me ♪ ain't nothin to me [ crowd murmurs ] hey! ♪ [ howls ] ♪
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this stunning closing hole has welcome back to a special edition of "squawk box" live from pebble beach. this hour more from at&t's randall stephenson. former yahoo! ceo carol bartz and clint eastwood. >> the one thing about getting into the senior status of life, like i am, you don't really care. you just say what you say, and you can get away with it. >> plus david dorman, nonexecutive chairman of cvs caremark. and "squawk" market master jeremy siegel. a special hour of "squawk box" starts right now.
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>> welcome back to special edition of "squawk box" here on cnbc, first in business worldwide. i'm joe kernen. along with becky quick, we're coming to you live from pebble beach, california. andrew ross sorkin and steve liesman, back at the headquarters, world headquarters of cnbc back in foefrt lee with "squawk" market master jeremy siegel. >> it said holding down the fort. >> used to be fort lee. sort of -- >> close. >> with us on the set. i'm living in the past. that happens as you age. carol bartz, former ceo of yahoo! i got distracted. i was thinking about something else. >> i know exactly what you did. you were reading one point -- >> we've got carol bartz here today. we've heard from many of the other stars of the business and
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entertainment world including at&t chairman and ceo randall stephenson calling on the government to cut out the uncertainty. >> when i have conversations with our policymakers in washington, my challenge is always, look, if things have to change, let's get them changed and get it put in place and get stability for the business environment. and so right now, it's just very volatile. it's very uncertain. and i believe that's a lot of what's causing the first couple of quarters of this year to look rather stagnant in terms of growth. >> plus legendary actor and director clint eastwood opens up about that now famous empty chair speech at the republican national convention. >> i just decided to go a little different route because i figured they've already heard that from about ten other people in front of me. so i just try something a anew. probably seemed odd at the time. but you know, i'm an odd person.
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>> we'll also tell you what was the inspiration behind that empty chair idea. he gave that away to us and we'll tell you a little later this morning. plus we have david dorman, the former ceo of at&t and the current nonexecutive chairman of vcs caremark. because stay tuned because you never know who might walk out to set on pebble beach. we always have a few surprise guests who pop up. right now back to andrew and steve at cnbc headquarters for your morning headlines. >> thank you, becky. the buzz story of the morning, nemo. the powerful winter storm taking aim at the east coast. as you can see from these live pictures of times square, snow already falling in new york city. forecasters warn it could be among the worst ever. more than two feet of snow possible in boston. a foot or so is expected in new york. many cities are telling residents don't travel if you don't have topso far, and this has already changed this morning. airlines have canceled about 3800 flights. a number that will undoubtedly grow throughout the day. when we started at 6:00 this morning we were talking about 2600 flights that had been
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canceled. we're going to be checking in with mike seidel from the weather channel in just a couple of minutes. he's in massachusetts where the storm will likely be the strongest. in our business headlines this morning, justice department and multiple states are reportedly discussing suing moody's or defrauding investors. but any move is likely to wait until a similar lawsuit against rival standard & poor's is tested in the courts. by the way, that could take years. separately moody's reported fourth quarter profit of 70 cents per share, one cent above estimates. also giving the upbeat forecast for 2013. and mcgraw-hill's credit rating has been cut by the rating agency fitch. this is sort of funny, right? you have one cutting the other guy. now rates mcgraw-hill at triple-b-plus from the prior a-minus that follows $5 billion government suit against the subpoena standard & poor's unit over financial crisis era ratings. also worth noting that they are supposedly spinning off s&p. so what does that mean? and finally the faa is clearing boeing to restart test flights of its grounded 787
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dreamliner. the goal is to get more data on potentially faulty batteries. federal officials are also demanding a closer look at how the batteries were approved. this may delay resuming delivery of boeing's newest aircraft. take a look at the stock there. you can see what's going on. i don't know how you play that anymore. and finally mcdonald's reporting january same-store sales following 1.9%. that is worse than expected. the only bright spot, u.s. sales, which can beat analyst expectation. steve? >> if boeing's earnings are as volatile as that chart shows the stock price to be, you got a thought on that? i mean it's a funny company, right? i mean you would think their order stream, i mean that's ridiculous, right? look at that. >> that was before the batteries. >> yeah, right. the dreamliner is a big part of boeing. >> i'm wondering how many of those peaks and valleys are related to news on the dreamliner. being on time, being late. >> i think a lot, absolutely.
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>> let's go beyond boeing and take a broader check of markets right now. just, i mean, just call it flat. nasdaq up a little bit. dow jones down a little bit. s&p down a little bit, as well. is that all we're looking at right now? >> i think so. >> but we're going to continue the conversation about the markets. bulls trying to end the week on a positive note. you think it will stay positive? we'll see whether it stays positive after yesterday's decline in equities. request us, constance hunter, head of economics at international solutions network. and jeremy siegel, and good morning to you. thank you for being here. you were bullish, too. we have too many bulls at the table. what is going on here? >> i haven't been bullish for awhile. this is a bit of a shift for me. >> then you're late. >> i don't think so. look at the lipper data, people are just going back to stocks. they're just beginning to go back. i don't think i'm late at all. and we're not going to go straight up, i mean, we have all this noise coming out of europe, that's making people worried,
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deja vu all over again. is it like last year, where europe overtakes the news in the u.s. but look at the mortgage data that came out earlier this week. year over year, new purchase applications are up 18%. that's a real number. i mean, you know, the bears would come back and say it's institutions buying homes. no it's not. >> look at the margin compression you've seen in some of the earnings. >> margins so high right now. margins are ridiculously high. >> i'm talking about the economy -- >> talking about the real economy not this economy we talk about here on the set. i know what you're talking about. >> i have a metric i just want to throw it out to our esteemed guests here and this is dangerous. i was thinking about this. could be totally wrong. everybody says everybody's bullish, right? >> yep. >> how can everybody be bullish, if rates are still negative. constance, tell me if i got this rate. if rates are still negative it means -- >> you mean real rates.
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>> real rates. people are so risk averse that they're willing to buy a ten-year treasury and receive a negative return. and in that environment, i have no problem thinking that in general the world is bearish because they're going to accept a real negative real rate. is that a good metric to follow? >> look, the fed isn't influencing the rate -- >> influenced the rate. okay. >> but even still, when you take that into account, you're right. there are still people willing to hold 9 ten-year treasury, and my prediction, actually, is that we get a backup in rates this year. is it huge? >> it goes positive, or -- >> well i guess it depends on what happens to inflation. it could go slightly positive. right? >> for good -- >> 2.5 -- >> let me mention something. when the market was at its peak in 2000, that real rate was over 4%. >> can we put up a chart of the ten year? it's 2%. inflation is 2%. call it that. >> right. >> so i am willing to give the government -- forget what the
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fed is doing. people are still making private sector decisions. this, andrew, is the metric of whether or not people are bullish or bearish out there. >> exactly. >> there is still a ton of money. >> yes. >> that's willing to hold or gift the government money for the protection of giving the government money. >> steve, what about the $3 trillion -- in funds earning zero? >> and that money. >> they're still -- >> ship andrew. >> we had david einhorn yesterday, and we're talking about cash on the balance sheet. >> david woke up to the idea -- >> he talked about his depression era grandmother who holds onto the cash, right? >> right. >> so my question is, how long do we hold onto the cash? even with the metrics you're talking about, it is very possible that people are going to remember this past experience for a very long time. >> hmm, i mean when you see corporates holding onto cash -- >> i'm talking about people in the market. zblfsh's not bullish. you've just made my argument for
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me. >> that's really the question. >> investors are screaming for cash. they need income. they're not getting it from the money funds, not from the bonds. let's encourage and get it from the stocks. let's get some dividends out there. >> okay, give me a number. >> he's giving me 15,000. we had ron baron on. he gave us 15,000, then he had 20,000. then maybe even 30,000. >> about the dow? >> not this year. >> are we in a time warp? >> ron had a general point that stocks are going to go up. that's been the general trend. >> on a 7% annualized -- do you believe that that is -- >> annualized 7%. if you merge it for last year, what were we up last year 12.5? maybe 5 this year to -- >> right. >> i've managed my metric and this is the key to whether or not people get bearish. i've decided i need 5% to send my kids to school so that's my
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metric now. that's part of the bullishness and bearishness, people coming in willing to take a lesser return -- >> before inflation. >> i -- you're the one who knows about academic inflation. you're probably responsible for that. given what you're pulling down professor. but that's the key. you have to have a certain amount of money minus inflation in order to bring -- am i going to make 5? >> 5% before inflation and stocks i think is like a slam dunk for >> then i could send my kids to school. >> we're going to thank you for coming. >> thank you. >> appreciate it. good to see you. >> got to see you more often. >> right now let's get back to pebble beach where becky is. >> andrew, thank you very much. one of the big great things about being here at pebble beach are the people that you get to talk to and that you get to catch up with all over the place. political leaders, talk to business leaders, and yesterday we caught up with a true american icon. clint eastwood. the legendary actor and director is, of course, also active political politically. he's also a strong supporter of the work that was done by alan simpson and erskine bowles and
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he says that he is frustrated that washington hasn't done anything with their plan. they were just dismissed and that was the end of it and that's kind of -- it's almost like they don't give a damn. and so if they don't give a damn why do they expect anybody else to. and obviously the -- you know, people get complacent, and then things really go bad. >> that was an example, though, of a democrat and a republican working to the, simpson is a republican, bowles is a democrat. do you think there's room for that in washington today? >> well, there is with those two guys. they are probably smarter than most. yeah, there's room for it. has to be room for it. you've got republicans, the majority in the house, the house of congress and senate, majority is democrats, and you've got the presidency. somebody's got to give somewhere along the line. and if they don't give, then it
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will just be more of the same. then we'll slip back into recession again which would be very worrisome this time. >> you can watch more of our conversation with clint eastwood online at squawk.cnbc.com and we'll have more later in the program including what inspired him to make that chair speech at the republican national convention. when we come back this morning on "squawk," david einhorn appeared on the program yesterday. calling for apple to lose its depression-era mentality. we'll talk more about that in just a moment. plus we will talk about apple's strategy with a veteran executive, david dorman is the former chairman and ceo of at&t. he is currently the cvs chair mark nonexecutive chairman. and former yahoo! ceo carol bartz. cial advisor should focus on your long-term goals, not their short-term agenda. [ woman ] if you have the nerve to believe that cookie cutters should be for cookies, not your investment strategy.
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welcome back to "squawk box," everyone. hedge fund manager david einhorn calling out apple for not using its cash reserves more effectively. >> people who've gone through traumas, they sometimes -- and apple's gone through a couple traumas in its history, they sometimes feel like they can just never have enough cash.
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>> that's the rationale behind the lawsuit that einhorn filed yesterday. he wants to try and prevent apple from making its harder to issue preferred stock. joining us to talk about this and a lot more is david dorman. he is the nonexecutive chairman of cvs caremark, the lead independent director of motorola solutions and former chairman and ceo of at&t. it's always great to talk to you here. thank you for joining us. >> good to be here. >> you know an awful lot about what's happening behind the scenes, just in terms of how technology works, especially with all the phone services that are coming out with smartphones right now. you hear about what's been happening with apple. and i just wonder if you could share your thoughts about how the company's been doing, and where you think it's kind of headed from here? >> apple's had an incredible run. people forget, motorola and the razr told 250 million copies with sort of the standard for everyone and no one remembers that and motorola's market share shrunk below 10%. and now obviously it's owned by google. apple is facing sort of the
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ballistic apogee. this thing has grown and accelerated quarter after quarter and you've now reached a point where the market share could have peaked. my guess with samsung and android, and the other manufacturers gaining traction, it's going to be hard for apple to repeat what they've done in the past. >> you're not suggesting that we're watching the beginning of the end of the iphone, though, are you? >> i don't think it ends. i think this thing still has legs. it's got a very long tail on it at the very least. apple has an ecosystem that they built around the iphone, the ipad, the ipad mini. but think about it. they're doing what they're doing with very few products. this is not a company with 200 products. this is a company with three or four critical products and continuing to innovate the pace that they have is very hard to do. >> what about international? there's so much more room. >> that's true. >> every ten points from 700 we've heard about number the valuation is still not expensive and number two the market
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penetration is still low everywhere. and as we've come down all the way from 700 -- something's happening. and i haven't heard anyone say that there could be market pen -- because it's almost single digits half the time. just in the teens. >> look at china, where there are some estimates, 500 or 600 million users of phones already. china is going to have strong, indigenous suppliers. yes, apple will be in the market. but i don't think it's a case anymore where people are saying the only choice i have if i want to be cool is apple. i think that's probably the fundamental. in the u.s., certainly you can look at it and say android has gotten, you know, a good foothold. you've got plenty of people making it. i'm just suggesting it's really hard to carry on what they've carried on. the amount of value alcohol has collapsed into themselves from the entire mobile market, carriers, and providers alike, is pretty amazing. >> you might think if steve jobs were still around maybe you'd think, there will be the next
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thing that you're able -- >> sure force of personality, you have to -- >> there are so many talented people there. >> i remember the razr. i didn't think anyone would ever migrate and within five years people said motorola makes phones? >> exactly. >> and you know, you have -- >> this is a very short cycle business where fashion is important, cool is important, and you can sort of see now that people who have the iphone are not as enamored of it as they were five years ago. they're willing to try new things. and at least look. i have to tell you, i wouldn't want to take them head-on. i think that they still are formidable in so many ways. but they're looking a little more vulnerable than they were, you know, certainly two years ago. >> a big part of getting iphones out there in people's hands, not just iphones but all smartphones, has been this idea that the carrierses like at&t will end up subsidizing a big part, big portion of the cost of the phone.
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now, there is talk that t-mobile might start trying to morph away from some of those subsidies or at least do something where they finance the phone over several quarters for you. are we going to get to the point where the consumer really has to put up a lot more money or a much larger percentage of the cost for these phones? >> i think as competition makes the difference greater, between what you would have to pay for an iphone and what you pay for say a samsung phone, the carriers have it in their interest to have other strong suppliers. to the extent that apple can dictate the terms to an at&t and verizon differently than the other guys, they're not going to like that. so at&t and verizon are going to, you know, launch the blackberry 10. they're going to put the samsung new products out there, and google phones and lg phones. because it's in their interest to have apple have strong competition. >> it's a great point. >> we're wrapping it up. i was going to ask you about lipitor and how your health is -- no, no. we've been talking about lipitor. but it's because your cvs executive chairman and you had to watch, you know, that path.
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and then i was going to ask you, just looking at the, we're going to implement obama care over the next couple of years. >> right. >> that must be daunting even for cvs, isn't it? >> you know, it's one of those things where it should provide opportunity adding 40 million or so new people to health care coverage, undoubtedly they'll go see the doctor. doctors will prescribe medicines for them. but there's a profound fact here that so many of the people that are being added are younger, and so you're in a situation with -- it's not really clear and how it will be implemented in the states, what the exchanges will do. what employers will do. >> good uncertainty or bad uncertainty? >> well, i don't know. uncertainty to me is always bad. >> always bad. >> it's only good -- >> what is good uncertainty. >> if you have no hope and uncertainty means that you may have hope. >> if you're terminal -- >> if nur not necessarily terminal uncertainty there is probably good. anyway, i guess. uncertainty is bad.
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david dorman, thank you. >> you bet. >> good luck on today. >> you two will be swimming. >> more from clint eastwood, including where he got that idea for the now famous empty chair speech. at the i'm going to say it, says it, the rnc convention. convention, convention. convention. help you see your big picture. with the fidelity guided portfolio summary, you choose which accounts to track and use fidelity's analytics to spot trends, gain insights, and figure out what you want to do next. all in one place. i'm meredith stoddard and i helped create the fidelity guided portfolio summary. it's one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. [ male announcer ] you're not the type of person who sets goals
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we call it goals driven investing. your life has a sense of purpose. shouldn't your investments? ♪ expertise matters. find it at northern trust. welcome back to "squawk box" this morning. let's get an update on this winter storm nemo. threatening blizzard conditions in the northeast and the weather
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channel's mike seidel joins us now from, where is he? in massachusetts. good to see you. how you doing out there? mike, can you hear us? i'm not sure that mike can hear us. mike, you there? no snowe just yet for mike. but we're going to try to get back to him at some point, figure out -- do we have him now. mike, can you hear us? nope. we will try this again. we're going to take a break and then we'll talk to mike and figure out what's going on with the weather. in the meantime, breaking economic data. just a few minutes away from international trade data for december. as we head to a break, take a look at u.s. equity futures at this hour. see how the market is setting up. dow looks like it will open up a little off but everything else relatively marginal for now. come on, nowadays lots of people go by themselves. no they don't. hey son. have fun tonight.
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welcome back to "squawk box." we're going to get trade data in just a minute. first the weather channel's mike seidel joins us with an update of what's going on. good to see you finally, mike. >> hey, good morning, andrew. out here at revere beach, just north of logan, the north shore of boston, where the snow is going to be here in here in a
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matter of few minutes. we're looking at a blizzard warning for parts of seven states. the entire state of connecticut, and coastal areas of massachusetts, a coastal flood warning. high tide in about an hour comes up to about here. we're concerned about the high tide tonight and 10:00 a.m. tomorrow morning. that's going to take the atlantic up to the sea wall. property here on revere beach will be fine. but when you think about 50, 60, maybe 70-mile-per-hour wind gusts we've got to be concerned about power outages. already many airports have canceled flights. 2800 systemwide. 500 flights, andrew, have been canceled so far at logan. travel will be next to impossible beginning midafternoon. the city is effectively going to shut down. >> thank you so very much. steve. >> just seconds away from the data. in fact it's out now. rick santelli at the cme in chicago. rick the numbers. >> hello cow. 38.5 billion is the trade balance. that's a deficit. but it's under 40 billion. that is really shocking. the last time we were under 40
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billion was november of 2010. so this is really a pretty big deal. we're expecting, you know, 8 billion wider deficit, and 46. and last month, had the most subtle revisions, we'll just call it a push. so you know, i'm going to have to ponder this. we know that there's a lot of foreign exchange going on in the world. most of it right now isn't free market driven, it's central bank printing driven. thinking this through, of course, is going to have big possibilities for strategic trades down the road. especially if the offshoot of what's going on potentially between europe, japan, maybe to a lesser extent china, is going to boost the value of the dollar. is that something that's going to help or hurt? how important is this number? all that, of course, will be defined by the market at some point. yields are a bit lower today. as a matter of fact on thecoms, one week ago today, friday, pretty much the high close going
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back to april for most maturities. for the ten year 202 closing yield. we're 18 basis points higher on the year. back to you. >> hey, rick, this is a big deal for that fourth quarter gdp growth. >> absolutely. >> here's the deal. about a billion compared to what was originally estimated is worth 0.1 gdp point so we might have just added 0.7, 0.8 gdp points to the fourth quarter. i don't know where all the adjustments had us the last i saw we were still at a negative 0.1. but, professor siegel did point out there's been a conundrum which is we had this relatively strong payroll growth in the fourth quarter but not necessarily the gdp growth to go along with it. i think it's still going to end up being a weak quarter. but not as weak as presented. let's bring in joel naroff. maybe rick will stick with us.
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we have our guest host jeremy siegel to sort of unpack this puzzle that's out there. joel, good morning. >> good morning, steve. >> so tell me what this does to the gdp forecast for the fourth quarter? >> well, you know, i think we can, you know, pretty easily say that there was not a decline in growth in the fourth quarter. and i agree, when you look at the economic, you know, elements of the fourth quarter numbers, strong investment in equipment, and software, decent consumer spending, really good durables, excellent housing, the economy was really good. if you look at why we didn't get the positive number, or now what we'll even look at a weaker number, it was some temporary factors. i think when we get the revisions it will be up and also sets the stage for even a better first quarter growth number. >> joel, tell us now what you think the fourth quarter really did in terms of growth, and how to think about what the right growth rate is to think about. i'm guessing you're not saying this is the gang buster economy.
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but it's also not one that's declining. >> no, no, not by any means. i -- first of all, i had a number closer to 2.5 going in to the report, so i was about as far off as you could possibly be. but when you look at things such as what are businesses doing, what are louseholds doing, who's the housing market? what's the vehicle sector doing, that growth was roughly in the 2.5% range. >> yeah. >> e where we got the negatives was from the government, from defense, and you know, largely from inventories. that's going to turn around. i think the inventory decline was just an insurance policy. >> okay. >> that's all. >> rick, can you tell us if the bond market cares about this? reassessing the fourth quarter, you could argue, it's a rear view mirror issue. >> yeah, you know, it may as well be. because, actually, we decreased a basis point yield. we've rallied a bit in treasuries. and the preopening equities haven't budged at all. so, my guess is, there's a
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couple ways to look at it. you know, 157,000 was a loss of momentum. a lot of the positive growths could be attributed to the adjustment process in jobs. and housing, you know, i'm sorry, i think we for sure hit the inflection point in the rear view mirror. but i don't think i could ever use the word excellent. so i think it's a semantics issue. you know, it's relative growth. it's change of rate. you know, all that is improving. but we're nowhere near the type of growth space we need to be, and i think that the market is very sensitive to that, at least on the fixed income side. the equities side is a different story. >> let me get to professor siegel very quickly, is this solving a puzzle for you? >> it helps. when we got that minus 2% productivity growth, oh, my god. and, again, this helps us, i think, with some inventory changes. we're actually probably up to plus one or very close. >> a full one percent?
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>> there's a still a puzzle but it alleviates -- >> about half of the puzzle. >> professor siegel thanks very much. joel, i'm glad you were here to help me do the math in realtime and rick, thanks a lot. >> okay, guys. coming up millions saw clint eastwood's conversation with an empty chair as a stand-in for president obama at the rnc convention last year. still ahead we're going to get the inspiration behind the empty chair idea. plus, stocks to watch ahead of the opening bell. we're going to check in with jim cramer at the new york stock exchange.
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welcome back to a special edition of "squawk box" where we are live from pebble beach. yesterday we got the opportunity to catch up with clint eastwood and ask him about that famous empty chair speech at the republican national convention last year. obviously it caught a lot of people's attention, and he's still hearing from people when he walks down the street. here's what mr. eastwood had to say about that. >> i just decided to go a little different route because i figured they've already heard that from about ten other people in front of me. so i just try something little anew. and it probably seemed odd at the time. but, you know, i'm an odd person. >> what reaction did you get from people? when you came back home? when you talked to people on the streets and things? >> on party lines, the party lines either loved it or hated it. but so then after awhile peen people that hated sa oh, what t
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heck seemed like it was a fun thing to do. >> it's funny, when we sat here last year we talked about the ad that you had done for the super bowl for chrysler. >> right. >> and the outrage that came to that. there were a lot of people on the right saying this was an endorsement of president obama. >> yeah. >> and then you had the outrage that came after the rnc where people were saying this was an outrage, too. are you surprised by the feedback that you got just whether from the media or other places? >> it wasn't a bouquet for -- it was just a bouquet for working people, and it was encouraging or if there's a momentum going, which everybody thought there might be at that particular time at least in the auto industry, then let's keep it going. so that's all it was intended to do. and, the commercial did. i notice this year, chrysler's doing very well, as well as gm and ford. but, you know, i don't know how long if it slows back down again maybe really hard to get the
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engine -- >> have you been surprised that these messages created such outrage? i mean, have you been surprised by the reactions? >> no, i'm not surprised at anything. you know the one thing about getting in to senior status of life, like i am, you, you don't, you don't really care. you just say what you say, and you can get away with it. >> that's right. he said it's okay with him. i asked him if he would shy away from making messages like this in the future from saying anything. he said absolutely not. it just makes him feel like it's more important to really start talking about some of these things. in fact, off camera, he actually told me what gave him the inspiration with that empty chair speech. he said that he had been standing at his hotel getting ready for the republican national convention and he heard this song -- "i am, i said" by neil diamond. these are the lyrics. ♪ and no one heard at all not even the chair ♪ >> so that's where he heard this.
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he was standing right there waiting as they went on beforehand and he saw a chair sitting there and he was sitting there thinking about the empty chair theme. one of the guys backstage said do you want me to take that chair out for you do you want to sit down? and he said no, just take it out. take it out and put it there and it was kind of happened at that moment just kind of inspiration while he was listening to the song. >> that's funny. does anyone know this? >> no. i've never heard it, either. he just kind of told me as he was walking away, just -- what made you come up with that? he said oh, it was this song. >> and i knew -- i mean i have talked to him a few times, i don't know him well, but i knew that he at this point in his life, he's clintz eastwood and he's going to say whatever he wants to. and i don't think it bothered him one bit. you saw the twitter sphere light up and it was on party lines. he went from and people that you know it's sad people on the left that used to think of him as iconic suddenly thought of him as senile i think. >> yeah, he said he has a very thick skin and he's used to it
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because in his business you hear critiques and criticisms of everything you ever put out. >> in his business? >> yeah, right. there are a lot of people who probably have thick skins around here. but he said you hear from these people and you let it run right off your back. people who think your films are terrible are stupid or you know are not quite as in tune with things. people who think you're great you think they're wonderful and you get through with it that way. our guest host this morning is -- >> iconic. >> iconic woman herself. carol bartz. >> well, thank you. >> who's joining us here to talk about everything that she's been doing in silicon valley. carol it's interesting. we were talking earlier, you said that you've been mentoring a lot of people, that you might with a lot of people right now. tell me a little bit about what you're doing. >> well, i mean, i certainly can't compare myself to eastwood. but as you get older you have had some experiences. so, and i'm usually pretty willing to share an opinion. so i get asked to join a lot of people for coffee and give some
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advice and counsel and that sort of thing and that's really been fun. because, you know, when you're -- when it's an employee, you have an obligation to the company to try and save them or this or that. but when you're a neutral party, and they say should i do this, should i go here. what about this boss? it's much more fun to have a conversation. >> and when you're having conversations like that you probably have a better chance of seeing what's really happening in silicon valley. what are the new things and new trends. what do you think are some of the leading things really just coming around at this point? >> well, it's everything mobile. i mean, and that goes without saying. and the whole app-ification of the world. and by the way the low-cost entry. you know, back when i was like employee 100 at sun, you know, you had to use your cash to buy computers and hopefully make it and you know, we'd all go to the loading dock and ship them off, and now with cloud computing i mean, a couple bucks and you can
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get in. and so you can try anything. and which is of course what the valley has always been about. but it's more now. it is just more, more, more of everything. >> how do investors kind of look and see what's coming with that thing and figure out how to position themselves? >> well, investors get overly excited about things. we were talking about the app-ification before. it's not how much they came down. it's how much they ran up because this euphoria. i think apple's a fantastic company and apple has long legs and they're going to innovate in a lot of areas. but it's so much fun now to pick on them because they went from -- >> $600 billion market. >> yeah. >> and it's a lot of large numbers at some point and nothing grows to the sky. >> absolutely. >> and 600 billion as a market cap discounted a lot of great things happening forever. >> yes. >> even though we heard the valuation was cheap and
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everything else, discounted, and i saw it with cisco. >> seen it with everybody. >> a few companies hit 600 billion, 700 billion and they're all 200 billion now. >> it's interesting. there used to be a rule of them that you couldn't get past the $1 billion mark. >> we never did. trillion sorry. billion -- >> but as a company or $100 million. >> you don't remember that. >> well i don't remember a lot. you know. i'm kind of like clint, but -- >> you weren't even -- >> you were -- >> oh, yeah, yeah. >> carol, thank you. we're going to have much more with carol through the show. steve we'll send it back over to you. >> thanks very much, becky. real quick, ian shepherdson writing in saying that it does, indeed add 0.7% to the fourth quarter gdp. we're going to keep reporting these as we get estimates from different economists as to what the big trade surprise means. much more from former yahoo! ceo carol bartz plus stocks to watch
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ahead of the opening bell. we'll check in with jim cramer at the new york stock exchange. right after the break. a final g. this is for real this time. step seven point two one two. verify and lock. command is locked. five seconds. three, two, one. standing by for capture. the most innovative software on the planet... dragon is captured. is connecting today's leading companies to places beyond it. siemens. answers. i've got a nice long life ahead. big plans. so when i found out medicare doesn't pay all my medical expenses, i got a medicare supplement insurance plan. [ male announcer ] if you're eligible for medicare, you may know it only covers about 80% of your part b medical expenses. the rest is up to you. call and find out about an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company.
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folks we have been tracking powerful nor'easter nemo. this storm is headed right for
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the east coast. nbc's erica hill joins us from a place that's impacted in a big way. laguardia airport. good morning, erica. >> yeah, hey, good morning again to you. major impact here, of course, because these three new york airports right in the thick of it, along with boston. of all the cancellations we're seeing, which is just over 2700 right now, today, 1740 of those in the new york area. that accounts for about two-thirds of the canceled flights. here's the good news. i was just speaking to some folks at the gates behind me. while it was pretty busy earlier the lines were wrapping around everybody had been very patient and very calm. which is exactly what you want to hear as much as it may be annoying to hear over and over again, you need to pack your patient when you do come to the airport. people seem to be doing that. a lot of people tried to get out to get on an earlier flight i today. we do know flights have been canceled tomorrow as well. what we're hearing is probably between 2:00 and 5:00 p.m., a lot of airports in this area, in
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new york will be closing, and then resuming operations hopefully around noon, maybe a little later afternoon on saturday. one of the people i spoke with, said she actually heard it may be 1:00 at laguardia. they're expecting things to get busy here around 10:30. when we last spoke on "squawk box," there were flights for sunday and monday. right now i have not seen any cancellations for sunday and monday. saturday tends to be a light travel day so maybe they can pick up some of the slack, get things back on track before travel starts sunday and monday. >> erica, thank you very much. >> let's get down to the new york stock exchange. jim and david join us now. hey, guys. >> how are you? >> good. we can go a couple different directions. we can talk weather. but perhaps i still want to get -- we had a little bit of your views yesterday on apple, jim, on "squawk." later you talked a little more about it. given what david eihorn said,
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any thoughts? >> what if they actually need the money to build out, or to make partnerships with some of the piggest companies that have tv businesses. i mentioned to david, what happens if they go to verizon and say, listen, just like you have with vodafone, we will buy 50% of fios, david. >> i want to explore this idea a lot more on our show. >> but jim, what could they need the money for? jim? $137 billion, how many companies could they buy in the s&p outright with $137 billion? if they really needed it, they could borrow it. >> you could buy cbs, murdoch's, disney and comcast at one time talked about merging. you could buy comcast. >> it was way too low on price. >> but if you were to do a 100% premium to where disney is right now, you would need every penny. maybe we're not thinking big
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enough. maybe they aren't thinking big enough. >> that's what i think. i think they're sitting on it and they don't know what to do with it. i think it's a use it or lose it thing. >> i think einhorn, there are two sides to every story, how in bad faith was apple with einhorn is very much a question. i don't think there was nearly as much bad faith as einhorn made it out to be. financial engineering, it's antithetical. i think that matters. >> jim, david, we're going to see you in just a few minutes. we're going to go back -- >> wait a second. >> yes, please. >> i think we're going to get 14 inches. >> 14 inches? that's the prediction from cramer. >> 14 inches. >> where is that? where is that measurement taking place? >> this is the adirondacks. >> i'm going to take 12 inches. and we're playing price is right rules. >> i'll take the spread. i'll do a ladder thing.
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>> come on, guys. >> we've got to get back out to pebble beach where i don't think there's any snow, happily. >> no snow. but plenty of precipitation here, though, andrew. probably 14 inches of rain. the over/under when it comes to rain, it's been pouring. the tent looks like it might collapse over here soon. maybe it will do it live on camera when we come back. we'll be back after a very short break. monday on "squawk box," taking the pulse of the bull rally, our guest host will be paul mcculley. "squawk" starts monday at 6:00 a.m. eastern.ility. more "likes." more tweets. so, beginning today, my son brock and his whole team will be our new senior social media strategists. any questions? since we make radiator valves wouldn't it be better if we just let fedex help us to expand to new markets? hmm gotta admit that's better than a few "likes."
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i don't have the door code. who's that? he won a contest online to be ceo for the day. how am i supposed to run a business here without an office?! [ male announcer ] fast, reliable deliveries worldwide. fedex.
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[ crowd murmurs ] hey! ♪ [ howls ] ♪ welcome back to "squawk box." let's get final thoughts from our guest host, carol bartz. i wonder long term about how you monetize mobile and everything seems to be moving that way. the tiny screen i've seen in the past other disruptive technologies, we traded analog dollars for digital nickels.
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it's great for the consumer. it's great for productivity and for people, but it seems like it's going to be challenging for all the companies involved. i don't know what the business model is. >> it's challenging for dell, for hp, anybody associated with the hardware side. anybody associated, microsoft, with facebook. >> is social media going to be -- is there something after this? or is it going to be variations of social media we're talking five years from now? or what else would it be? >> well, social media is a funny term. it covers a wide -- it just means people interact more. >> it was search for a while, the internet revolved around that, and content. suddenly that was replaced with this weird -- >> first it was mail. it's communications collaboration. you collaborate business, collaborate with your friends. but it is really both of t